INCOME TAX OFFICER-19(1)(5), MUMBAI vs. LIGHTEX, MUMBAI

THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI

SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER

ITA NO. 8960/Mum/2025 (A.Y.2014-15) Income Tax Officer-19(1)(5) Lightex Room No. 502, 5th Floor, Piramai 5070, A/E, Bharat Diamond Bourse Chambers Lalbaug, Parel, BKC, Bandra, East Mumbai Mumbai, Maharashtra v/s PAN : AAAFL0415G

Appellant Respondent

Assessee by Sh. Mayur Makadia Department by Sh. Surendra Mohan, Sr. DR Date of Hearing 05-03-2026 Date of Pronouncement 02-06-2026

ORDER PER KAVITHA RAJAGOPAL :- This appeal is filed by the Revenue challenging the order of the Learned

Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], National Faceless

Appeal Centre (“NFAC” for short)passed u/s 250 of the Income Tax Act, 1961 (‘the

Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15.

2 ITA No. 8960/mum/ 2025 ITO Vs. Lightex the reassessment proceedings had already been validly initiated by the earlier notice dated 21.06.2021 and were continued under the amended provisions in accordance with the directions of the Hon'ble Supreme Court in UOI v. Ashish Agarwal."

year under consideration dated 29/11/2014 declaring total income at Rs. 10,85,340/-. The

Assessee’s case was reopened based on the information available with the Department

that the Assessee has entered into purchasetransactions with Sh. Mayank belonging to

3 ITA No. 8960/mum/ 2025 ITO Vs. Lightex Gautam Jain/Rajesh Jain Groupof companies which is alleged to have been engaged in

providing accommodation entries by way of bogus sales, unsecured loans through various

benami companies operated and managed by Gautam Jain and Rajesh Jain Group,

amounting to Rs. 64,05,342/-. Notice u/s 148 of the Act dated 28/07/2022 was issued

and served upon the Assessee. The Ld. A.O. also issued notices u/s 143(2) and 142(1) of

the Act which were duly issued and served upon the Assessee. The Ld. A.O. passed the

assessment order dated 25/05/2023 u/s 147 r.w. Section 144B of the act determining total

income at Rs. 74,90,648/- after making an addition of Rs. 64,05,342/- under Section 69

of the Act on the ground that the Assessee has failed to substantiate the alleged bogus

purchase transaction to be genuine with cogent documentary evidence.

order dated 27/10/2025, allowed the appeal filed by the Assessee holding that the notice

u/s 148 of the Act dated 28/07/2022 and the consequent assessment order is barred by

limitation in terms of the proposition laid down by the Hon’ble Apex Court in the case of

Union of India and orsVs. Rajeev Bansal (2023) 469 ITR 46 (SC).

CIT(A) on the above-mentioned grounds.

record. The limited issue to be adjudicated in the presentappeal is whether the Ld.

CIT(A) was justified in holding the impugned reassessment notice and the subsequent

assessment order to be barred by limitation in terms of the decision of the Hon’ble Apex

4 ITA No. 8960/mum/ 2025 ITO Vs. Lightex Court in the case of Rajeev Bansal (supra) for adjudicating this issue. It is pertinent to

reproduce the relevant dates which are tabulated herein under for ease of reference

Sr.No. Particulars Date Remarks

1 Notice issued u/s 148 21.06.2021 Under unamended law (old regime) 2 Letter deeming old 31.05.2022 In line with Hon'ble notice as SCN u/s 148 Supreme Court A(b) directions in Ashish Agarwal 3 Appellants response to 15.06.2022 Reply submitted by notice u/s 148A(b) Assessee 4 Order passed du/s 28.07.2022 Approval and order 148A(d) with approval issued of PCCIT, Mumbai 5 Notice u/s 148 issued 28.07.2022 Present notice under under new regime challenge

notice u/s 148 of the Act dated 28/07/2022 to be barred by limitation as per decision of Rajeev Bansal (supra). The Ld. CIT(A) held that as per the decision of Rajeev Bansal

(supra) where the amended and unamended provision of Section 147 to 151 of the Act

was examined and the Hon’ble Apex Court held that the Taxation and other laws

(Relaxation and amendment of certain provision) Act, 2020 (the “TOLA”) can extend

limitation for re-assessment only up to 30/06/2021 and any fresh notice under the new

regime must independently specify the time limits and sanction requirements of the

amended Section 148–149-151 without treating time as having travelled back to the old

regime dates. It further held that the reassessment notices issued between 01/04/2021 and

30/06/2021 under the old law were validly converted as 148(b), show cause notices as per the decision of Union of India Vs. Ashish Agarwal (2022) 138 taxman.com 64(SC) but,

5 ITA No. 8960/mum/ 2025 ITO Vs. Lightex

any consequent fresh notices under the new regime should satisfy the condition that it is

within limit after TOLA which is only up to 30/06/2021 and have obtained proper

satisfaction under the new Section of 151 of the Act, hence the same was held to be

invalid. The Hon'ble Supreme Court conceptualized the “surviving time limit” where the

reassessment notices under the old regime issued between 01/04/2021 and 30/06/2021

were deemed to be show cause notices u/s 148A (b) of the new regime were the balance

or surviving period of limitation under the old regime as extended by TOLA is the

balance of limitation that was still left on 20/03/2020 which then got carry forward and

could be used only up to 30/06/2021 and any re-assessment action beyond that balance

period was held to be time barred. The findings of the Ld. CIT(A) on this issue is cited

hereunder for ease of reference:

“6.2.1 Discussion of judgment of Hon’ble Apex Court in the case of Union of India v. Rajeev Bansal In the landmark judgment of Union of India v. Rajeev Bansal (supra), the Hon’ble Supreme Court examined the interplay between the unamended and the amended provisions of sections 147–151 of the Act and the transitional provisions under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). At paragraphs 108 to 112, the Hon’ble Supreme Court explained the concept of the “surviving time limit”, holding that where reassessment notices under the old regime (issued between 1 April 2021 and 30 June 2021) were deemed to be show cause notices u/s 148A(b) under the new regime (per Ashish Agarwal), the balance or surviving period of limitation under the old regime (as extended by TOLA) would be available to the AO to complete the subsequent steps under the new regime. The period between issuance of the deemed notice and supply of material to the assessee, and the further two weeks allowed for the assessee’s response, were to be excluded in computing the limitation. The Supreme Court categorically held that after receiving the assessee’s response, the AO had to (i) consider the reply u/s 148A(c), (ii) pass an order u/s 148A(d), and (iii) issue notice u/s 148 within the surviving period. Any notice issued beyond such surviving time limit would be time-barred and without jurisdiction. For the sake of ready reference para 108 to 112 of the judgment in the case of Rajeev Bansal is reproduced hereunder: - “108. The Income-tax Act read with TOLA extended the time limit for issuing reassessment notices under section 148, which fell for completion from 20 March 2020 to 31 March 2021, till 30 June 2021. All the reassessment notices under challenge in the present appeals were issued from 1 April 2021 to 30 June 2021 under the old regime. Ashish Agarwal (supra) deemed these reassessment notices under the old regime as show

6 ITA No. 8960/mum/ 2025 ITO Vs. Lightex

cause notices under the new regime with effect from the date of issuance of the reassessment notices. The effect of creating the legal fiction is that this Court has to imagine as real all the consequences and incidents that will inevitably flow from the fiction. East End Dwellings Co. Ltd. v. Finsbury Borough Council [1952] AC 109. [Lord Asquith, in his concurring opinion, observed: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."] Therefore, the logical effect of the creation of the legal fiction by Ashish Agarwal (supra) is that the time surviving under the Income-tax Act read with TOLA will be available to the Revenue to complete the remaining proceedings in furtherance of the deemed notices, including issuance of reassessment notices under section 148 of the new regime. The surviving or balance time limit can be calculated by computing the number of days between the date of issuance of the deemed notice and 30 June 2021. 109. If this Court had not created the legal fiction and the original reassessment notices were validly issued according to the provisions of the new regime, the notices under section 148 of the new regime would have to be issued within the time limits extended by TOLA. As a corollary, the reassessment notices to be issued in pursuance of the deemed notices must also be within the time limit surviving under the Income-tax Act read with TOLA. This construction gives full effect to the legal fiction created in Ashish Agarwal (supra) and enables both the assesses and the Revenue to obtain the benefit of all consequences flowing from the fiction. See State of A P v. A P Pensioners Association [2005] 13 SCC 161. [This Court observed that the "legal fiction undoubtedly is to be construed in such a manner so as to enable a person, for whose benefit such legal fiction has been created, to obtain all consequences flowing there from. 110. The effect of the creation of the legal fiction in Ashish Agarwal (supra) was that it stopped the clock of limitation with effect from the date of issuance of Section 148 notices under the old regime [which is also the date of issuance of the deemed notices]. As discussed in the preceding segments of this judgment, the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assesses in terms of the directions issued by this Court in Ashish Agarwal (supra) has to be excluded from the computation of the period of limitation. Moreover, the period of two weeks granted to the assesses to reply to the show cause notices must also be excluded in terms of the third proviso to Section 149. 111. The clock started ticking for the Revenue only after it received the response of the assessees to the show causes notices. After the receipt of the reply, the assessing officer had to perform the following responsibilities: (i) consider the reply of the assessee under section 149A(c); (ii) take a decision under section 149A(d) based on the available material and the reply of the assessee; and (iii) issue a notice under section 148 if it was a fit case for reassessment. Once the clock started ticking, the assessing officer was required to complete these procedures within the surviving time limit. The surviving time limit, as prescribed under the Income-tax Act read with TOLA, was available to the assessing officers to issue the reassessment notices under section 148 of the new regime. 112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May 2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one

7 ITA No. 8960/mum/ 2025 ITO Vs. Lightex

days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.”

6.2.2 The aforesaid observation and the judgment of the Hon’ble Supreme Court are thatØ Firstly, exclusion of the period has been explained; a) the date of issuance notice u/s 148 under the old regime reckoned to be the date of issuance of the deemed notices u/s 148A(b); b) the period from the date of the issuance of the deemed notices till the supply of relevant information and material by the assessing officers to the assessees is to be excluded from the computation of the period of limitation; c) further, period of two weeks granted to the assessee to reply to the show-cause notice is also to be excluded in terms of third proviso to Section 149; Ø Secondly, once the response of the assessee to the show cause notice has been received, then “the clock starts ticking for the Revenue”, that is, after the receipt of reply, ld. AO has to; (a) consider the reply of the assessee u/s.148A(c); (b) take a decision u/s.148A(d) based on the available material and the reply of the assessee; and (c) issue a notice u/s.148 if it was a fit case for re assessment. Once it is found to be a fit case for re- assessment, the limitation clock starts ticking and it is mandatory for the ld. AO to comply with these procedures within the surviving time limit which was available to the ld. AO to issue re-assessment notice u/s.148 of the new regime; and Ø Lastly, the Hon’ble Supreme Court has given an example as how to calculate the surviving time. Calculation of surviving time has been laid down from the period when the first notice u/s.148 was issued under old regime till the last date of limitation for issuance of notice u/s.148 of the old regime; and that period has been reckoned as the surviving time period left for the ld. AO while issuing notice u/s.148 under the new regime. So whatever surviving time is left the AO has to issue notice within that surviving time. 6.2.3 Application to the Present Case Applying the above ratio to the facts of the present case: • The original notice u/s 148 (old regime) was issued on 21.06.2021. • The outer time limit for reopening A.Y. 2014–15 (six years from the end of A.Y. 2014–15) expired on 31.03.2021, but was extended by TOLA up to 30.06.2021. • Hence, as per the Rajeev Bansal ruling, the surviving time limit available to the Revenue is the number of days between 21.06.2021 and 30.06.2021, i.e., 9 days. • As per the directions in Rajeev Bansal (supra), the period from the date of the deemed show cause notice till the supply of information and the time allowed for reply are to be excluded, and thereafter the surviving time resumes. The computation of the surviving time limit, as per the Hon’ble Supreme Court’s framework, is summarized below:

8 ITA No. 8960/mum/ 2025 ITO Vs. Lightex

Sr. No. Description Relevant Period Remarks

Between 21.06.2021 and 1 Surviving period under TOLA 9 days 30.06.2021

AO prohibited from 21.06.2021 Period excluded - date of deemed SCN to 2 proceeding (per Para 105, 04.05.2022 04.05.2022 Hon’ble SC)

Period excluded - 30 days for supply of 3 Up to 03.06.2022 Para 106, Hon’ble SC information

4 Up to 15.06.2022 Para 107, Hon’ble SC Period excluded - 2 weeks for reply

5 Surviving time resumes 16.06.2022 9 days from this date

Last permissible date to issue notice u/s As per surviving time 6 24.06.2022 148 calculation It is therefore evident that the AO was required to complete the process of passing the order u/s 148A(d) and issuing the notice u/s 148 latest by 24.06.2022. However, in the appellant’s case, the AO passed the order u/s 148A(d) and issued the notice u/s 148 only on 28.07.2022, i.e., more than a month beyond the statutory deadline. Therefore, the impugned notice is clearly time-barred and consequently invalid. 6.2.3 In light of the above discussion, and following the binding decision of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal (469 ITR 46), the notice u/s 148 dated 28.07.2022 and the consequent reassessment order passed u/s 143(3) r.w.s. 147 are barred by limitation. Accordingly, the reassessment proceedings are annulled. 7 Since the assessment itself is held to be invalid on the ground of limitation, the other grounds on merits become infructuous and require no separate adjudication.”

of the Act issued in the old regime was on 21/06/2021 and the outer time limit for

reassessment of the year under consideration i.e. 2014-15 was six years from the end of

relevant assessment year which expired on 31/03/2021 stood extended by TOLA up to

9 ITA No. 8960/mum/ 2025 ITO Vs. Lightex 30/06/2021, surviving time limit available to the Revenue as per the decision of Rajeev

Bansal (supra) was between 21/06/2021 and 30/06/2021 which worked out tobe nine

days. The period from the date of deemed show cause notice till the supply of

information and further the time for reply as excluded by the direction given in Rajeev

Bansal (supra), the last date for issue of notice u/s 148 of the Act was latest by

24/06/2022, whereas in the present case, the Ld. A.O.’s order u/s 148A (d) and notice u/s

148 was issued only on 28/07/2022 which is beyond the time limit specified as per the

Hon’ble Apex Court, thereby making the impugned notice barred by limitation. Hence,

for the above reason, we do not find any infirmity in the order of the Ld. CIT(A) holding

the impugned notice and the consequent reassessment order to be barred by limitation.

Hence, we dismiss the grounds of appeal raised by the Revenue.

The following order is pronounced on 02/06/2026 as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (VIKRAM SINGH YADAV) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated: 02/06/2026 Kishore, Sr. PS

10 ITA No. 8960/mum/ 2025 ITO Vs. Lightex

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. Dr, ITAT, Mumbai 5. Guard File. BY ORDER, //True COPY// (Assistant Registrar) ITAT, Mumbai